House prices resume falls

So then, R.P.Data December house price data is out and the melt continues down 0.2% seasonally adjusted for the month:

The raw data was much worse, down 1.2% on the month:

But there was an upwards revision for November to 0.4%. Below find the full tables, with everywhere falling except  Sydney (which has been supported by the now expired first home buyer subsidy):

These are pretty poor numbers, most especially given that Sydney has inflated the result on the temporary first home buyer rush. Finally, here’s a chart of the falls to date peak-to-trough in nominal and real terms:

Much more coming later…


David Llewellyn-Smith
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    • He has conveniently failed to mention the significant pull-forward of Demand by Sydney FHBs. With the stamp duty concessions having expired on 31 Dec 2011, there is a good chance that Sydney FHB demand will drop over the first quarter, reversing Sydney’s recent gains.

      Wait and see….

    • I love that the industry sees a decline of 0.2%, and a 1.2% fall in raw terms, as a “recovery.”

      How bad does the data need to be before they can see which way the wind is blowing.

      I’m not saying that the market will continue falling, but when the data shows prices in a downtrend, calling a recovery based on one positive month followed by another negative one would seem a tad optimistic.

      I also like the angle in the article of “property lost money but shares lost more.” When the best you can say about your asset class is that there’s a different one out there that’s performing worse then it looks a bit like clutching at straws.

    • Sigh.. more work for BS moderators. Mr Joye’s last article faced a barrage of push back from commentators poking holes in his analysis.

  1. That’s some pretty ugly presentation of data there. I hope that the “Much more coming later…” will have tables.

  2. Diogenes the CynicMEMBER

    Yes the Perth figures reflect what I have been witnessing over the summer…properties above $1m are not clearing quickly, they keep coming back to the market at reduced prices. Vendors are starting to reduce their prices (10-15% is common) but unfortunately for them they still seem to be chasing the market down rather than getting in front.

    My cousin who lives in Elsewhereville fringe burbs had a buyer for her newish place (18 months old house) but the finance fell through even with a big 30% deposit. The banks are becoming cautious. Her comment was telling there are “just so many homes around us on the market – all new (under 3 years) and not selling.”

    The only bright spot is inner city units which seem supported by singles and DINKs who are moving here to pursue work in the HOLES. Strong competition for rentals mean some are persuaded to buy…one such buyer bought my Baby Boomer parents’ investment property basically as she was getting tired of chasing rentals.

  3. The continued “slow melt” in Melbourne is not unexpected given the current and growing oversupply of stock on market in that city but the continuing falls in Perth and in particular Brisbane are suprising. Property bulls have been spruiking an iminent recovery up north and out west – obviously they were wrong.

    • I wonder at what point the tune will change? My thought is (maybe) about mid year when the effects of bank lay-offs will start to come up in the unemployment rate

      • For me, i’d be guessing around Sept-October.

        The article yesterday with the comparison to the Case-Shiller index showed accelerated marginal decline in housing prices occured after the 2nd EOFY from peak prices, I think it’s April 15 in the U.S.

        When tax time comes around and many organisations see how much aggregate demand has shrunk for the 2nd year, it should hit home that credit fueled consumption is he old model, the lay offs should commence.

      • The tune changes when the spruikers have sold off their own properties.

        That could be a while, its akin to the time required before cult members realise their messiah isnt so.

      • I think the spruiker soccer match will go into extra time until April 2012 at least. January is deemed to be off-season and they will not report on Feb 2012 stats until March end.
        Then we move into the sudden death phase. With the housing stats coming after that period, I don’t think CJ will be able to bend it like Beckham.

  4. I just observed something, can someone explain it more to me.

    In the ‘quarterly returns’ they have the raw and seasonaly adjusted figures.

    Now I know it’s only a 6 months sample, but in ALL months bar october, the seasonal adjustment in adjusted upward.

    I do understand the concept of seasonal adjustment, and there is potential for a concentration of bias to be downwards in the first half of a calender year, but these seems a bit bizarre to me.

    Those figures show that AT NEARLY ALL TIMES, there is a seasonal bias upwards.

    Surely the ammendement from raw to seasonally adjusted has to zero out after a year?

    Is there an older data set I can observe to confirm whether downward seasonal bias occurs in the first half of a calender year?

    • you can find most of the releases for the first half of 2011 here:

      It appears that the seasonal adjustment (SA) in the first half of the calander year generally leads to downwards adjustments, with the opposite happening in the second half of the year.

      While I haven’t added up all the individual SA values, it looks like they sum to roughly zero.

  5. As bursting bubbles tend to be multiyear events that overshoot to the downside, i think anyone predicting a housing market bottom this year is exceedingly brave.
    More like two or three years of the same i would have thought.

  6. Surely it’s at least conceivable that we could follow the Japanese example, and that the “bottom” might be two decades away…